Baker Hostetler: Advertising and Regulation of CBD Products


If you have been to any kind of spa, beauty supply store or health food store in the past four years, chances are you have seen, if not purchased, a product with cannabidiol (CBD). The 2018 passage of the Farm Bill removed hemp-deprived products, like CBD, from the Controlled Substances Act, leading to a flood of CBD products to the consumer marketplace that boast a wide variety of health and beauty claims, from relieved pain to lessened anxiety, among many others.

However, these products are being produced and marketed in a largely unregulated fashion, falling through the cracks of Food & Drug Administration (FDA) regulatory oversight. Recent studies by the University of Wisconsin-Madison School of Pharmacy, Johns Hopkins Medicine and the University of Kentucky College of Medicine have found dangerous levels of inaccuracy in the labeling and marketing of these products. Specifically, these studies have found the majority of products were labeled with dramatically incorrect CBD levels and many products even contained undisclosed levels of delta-9-tetrahydrocannabinol (THC), the psychoactive ingredient in cannabis that produces a “high.”

The UW-Madison study analyzed beverages, oils and other miscellaneous CBD products (such as chocolate bars, honey and transdermal patches). Researchers determined that among the beverages analyzed (such as coffee, seltzer, kombucha, water, tea and beer), 78 percent were over-labeled (containing less than 90 percent of the CBD they claimed to) and 7 percent were under-labeled (containing 110 percent or more of the CBD they claimed). Of the oils, researchers found roughly one-third were appropriately labeled and another third were under-labeled, with one product shockingly containing nearly 130 percent of what was indicated on the label. Of the miscellaneous products, 67 percent were found to be over-labeled. THC was detected in 24 percent of the beverages, 55 percent of the oils and 71 percent of miscellaneous products.

A recent Johns Hopkins Medicine study found, of 105 products tested, only 85 percent actually had the correct amount of CBD claimed on the label. Of those products, 18 percent were under-labeled and 58 percent were over-labeled. THC was found (within the legal limits) in 35 percent of the products; however, 11 percent of those were labeled “THC Free” while 51 percent did not reference THC at all on the label. CBD products that are mislabeled as THC-free can create problems for individuals subject to workplace drug testing. Despite not being approved by the FDA to treat any of these conditions, 28 percent of the products analyzed made therapeutic claims (mostly about pain and inflammation). While “pain relief” may seem like a standard description, it is a drug claim that requires certain approvals from the FDA. Pain relief products can contain CBD, but the claim itself should be based on something approved for that purpose. Similarly, 15 percent of products tested made a beauty claim (e.g., reduce wrinkles), which typically isn’t subject to the same regulatory process as a drug claim but still requires adequate testing.

Researchers at the University of Kentucky College of Medicine found nearly half of the products analyzed were incorrectly labeled, the majority of which contained 90 percent or less CBD than claimed.

The vast inaccuracies of CBD product labeling and unsubstantiated claims pose a serious health risk to consumers and violate the fundamentals of marketing, perpetuating consumer distrust and harming the industry. At least one company has taken matters into its own hands and successfully brought a National Advertising Division challenge to a competitor’s CBD content claim, which it alleged significantly overstated the actual amount of CBD in the product.

There are obvious dangers for people using products with unknown active ingredient levels or unknown psychoactive ingredients. Over-dosing can cause unexpected side effects and adverse interactions with other drugs. Under-dosing can diminish or fail to generate potential therapeutic benefits consumers may seek. Overall, the CBD industry will suffer from this as will anyone who could actually reap the benefits from CBD.

Notably, the FDA isn’t unaware of these issues. It advised consumers to be cautious of unproven claims after its own testing revealed many products did not contain the advertised level of CBD. Because CBD is the active ingredient in the prescription anti-seizure drug Epidiolex, however, there are significant regulatory hurdles to its use in food or dietary supplements. Thus far, as a matter of enforcement discretion, the agency has only brought action against anyone making aggressive drug claims, such as the treatment of cancer and Alzheimer’s. This leaves a massive hole in CBD regulation, particularly in light of the growing evidence that many products misstate their ingredients. Some states have attempted to fill the gap with new licensing requirements for CBD products, but class action lawsuits may be more consequential for CBD sellers in the short term. For example, Curaleaf was sued in May for selling CBD drops that contained THC. The label did not have a warning about THC, which is required by law in Oregon. While the massive CBD market presents opportunity, the relative lack of a regulatory structure continues to create risk. Until Congress takes action and develops a pathway for approval and regulation, businesses will continue to struggle with the lack of clarity in this area.



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Jeff Hergot – Wildboer Dellelce LLP

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Elvin Rodríguez Fabilena


Julie Godard
Carl L Rowley -Thompson Coburn LLP

Jerry Chesler – Chesler Consulting

Ian Stewart – Wilson Elser Moskowitz Edelman & Dicker LLP
Otis Felder – Wilson Elser Moskowitz Edelman & Dicker LLP
Lance Rogers – Greenspoon Marder – San Diego
Jessica McElfresh -McElfresh Law – San Diego
Tracy Gallegos – Partner – Fox Rothschild

Adam Detsky – Knight Nicastro
Dave Rodman – Dave Rodman Law Group
Peter Fendel – CMR Real Estate Network
Nate Reed – CMR Real Estate Network

Matthew Ginder – Greenspoon Marder
David C. Kotler – Cohen Kotler

William Bogot – Fox Rothschild

Valerio Romano, Attorney – VGR Law Firm, PC

Neal Gidvani – Snr Assoc: Greenspoon Marder
Phillip Silvestri – Snr Assoc: Greenspoon Marder

Tracy Gallegos – Associate Fox Rothschild

New Jersey

Matthew G. Miller – MG Miller Intellectual Property Law LLC
Daniel T. McKillop – Scarinci Hollenbeck, LLC

New York
Gregory J. Ryan, Esq. Tesser, Ryan & Rochman, LLP
Tim Nolen Tesser, Ryan & Rochman, LLP
Cadwalader, Wickersham & Taft LLP

Paul Loney & Kristie Cromwell – Loney Law Group
William Stewart – Half Baked Labs

Andrew B. Sacks – Managing Partner Sacks Weston Diamond
William Roark – Principal Hamburg, Rubin, Mullin, Maxwell & Lupin
Joshua Horn – Partner Fox Rothschild

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Teddy Eynon – Partner Fox Rothschild